salesof goods act

1. Sale of Goods Act, 1930Sale of Goods Act, 1930
 A contract of sale of goods is aA contract of sale of goods is a
contract whereby the seller transferscontract whereby the seller transfers
or agrees to transfer the property inor agrees to transfer the property in
goods to the buyer for agoods to the buyer for a priceprice..
Sec.4(1)Sec.4(1)
 There may be a contract of saleThere may be a contract of sale
between one part owner andbetween one part owner and
another.another.
 A contract of sale may be absolute orA contract of sale may be absolute or

2. Essentials of contract of saleEssentials of contract of sale
 A contract (all essentials of validA contract (all essentials of valid
contract applicable)contract applicable)
 Between two partiesBetween two parties
 To transfer or agree to transfer theTo transfer or agree to transfer the
propertyproperty
 In goodsIn goods
 For a price, i.e. the consideration isFor a price, i.e. the consideration is
money.money.

3. Transfer of propertyTransfer of property
 Transfer of property means transferTransfer of property means transfer
of ownership. Mere transfer ofof ownership. Mere transfer of
possession can not be termed as apossession can not be termed as a
sale.sale.
 Sec.2(11) ‘Property means generalSec.2(11) ‘Property means general
property in goods and not merely aproperty in goods and not merely a
special property.’special property.’
 General property means allGeneral property means all
ownership rights and specialownership rights and special
property means limited rights.property means limited rights.

4. GoodsGoods
 Sec.2(7). ‘Goods means every kind ofSec.2(7). ‘Goods means every kind of
movablemovable property other thanproperty other than
actionable claims and money, andactionable claims and money, and
includes stock and shares, growingincludes stock and shares, growing
crops, grass, and things attached tocrops, grass, and things attached to
or forming part of the land which areor forming part of the land which are
agreed to be severed before sale oragreed to be severed before sale or
under contract of sale.’under contract of sale.’

5. Kind of goodsKind of goods
 Existing goods- Sec.6(1) these are the goodsExisting goods- Sec.6(1) these are the goods
which are in existence and are physicallywhich are in existence and are physically
present in the sellers possession. They arepresent in the sellers possession. They are
further classified asfurther classified as
 Specific goods- 2(14) – these are the goodsSpecific goods- 2(14) – these are the goods
identified and agreed uponidentified and agreed upon at the timeat the time thethe
contract is made.contract is made.
 Ascertained goods- these are identifiedAscertained goods- these are identified afterafter
the formation of the contract.the formation of the contract.
 Unascertained goods- these are the goodsUnascertained goods- these are the goods
which arewhich are not specifically identifiednot specifically identified or agreedor agreed
upon at the time of the contract of sale.upon at the time of the contract of sale.
 Future goods -sec.2(6) and Contingent goodsFuture goods -sec.2(6) and Contingent goods
6(2)6(2)

6. Price considerationPrice consideration
 The consideration for the contract ofThe consideration for the contract of
sale must be money. If goods aresale must be money. If goods are
exchanged against goods theexchanged against goods the
transaction is barter and not coveredtransaction is barter and not covered
by the act. However consideration mayby the act. However consideration may
be partly in money and partly in goods.be partly in money and partly in goods.
NO SPECIAL FORMALITIES ARE REQUIREDNO SPECIAL FORMALITIES ARE REQUIRED
FOR CONTRACT OF SALE. IT MAY BE INFOR CONTRACT OF SALE. IT MAY BE IN
WRITING OR ORAL OR IMPLIED.WRITING OR ORAL OR IMPLIED.

7. Sale and agreement to saleSale and agreement to sale
 When property is transferred fromWhen property is transferred from
seller to buyer at the time ofseller to buyer at the time of
formation of contract, an absoluteformation of contract, an absolute
sale occurs.sale occurs.
 When property in the goods is to beWhen property in the goods is to be
transferred at some future date andtransferred at some future date and
not at the time of contract, thenot at the time of contract, the
contract of sale is termed as ancontract of sale is termed as an
agreement to sell.agreement to sell.

8. Points of distinction- sale andPoints of distinction- sale and
agreement to sell.agreement to sell.
 Nature of contract-Nature of contract-
executed / executory.executed / executory.
 Transfer of property-Transfer of property-
immediate / future date.immediate / future date.
 Nature of rights of buyer-Nature of rights of buyer-
jus in rem / jus injus in rem / jus in
personempersonem
 Rights of buyer in case ofRights of buyer in case of
breach-recovery ofbreach-recovery of
goods, specificgoods, specific
performance / Damages.performance / Damages.
 Risk of loss- buyer’s /Risk of loss- buyer’s /
seller’sseller’s
 Rights of seller in case ofRights of seller in case of
breach-suit for the pricebreach-suit for the price
of goods / Damages.of goods / Damages.
 Right to resell- notRight to resell- not
available. / may resaleavailable. / may resale
but liable for damages.but liable for damages.
 Insolvency of seller-Insolvency of seller-
buyer can recover goodsbuyer can recover goods
/ if price already paid/ if price already paid
proportionate amountproportionate amount
can be recovered.can be recovered.
 Insolvency of buyer- ifInsolvency of buyer- if
price is not paidprice is not paid
proportionate amountproportionate amount
can be recovered.can be recovered.
delivery of goods can bedelivery of goods can be
demanded./ seller candemanded./ seller can
refuse delivery unless full

9. Subject matter of contract of sale-Subject matter of contract of sale-
Goods.Goods.
 Goods may be classified as :-Goods may be classified as :-
2.2. Existing Goods- a) specific goods, b)Existing Goods- a) specific goods, b)
ascertained goods, c) unascertainedascertained goods, c) unascertained
goods.goods.
3.3. Future goods- which do not exist with theFuture goods- which do not exist with the
seller at the time of sale. the contractseller at the time of sale. the contract
thus is an agreement to sell.thus is an agreement to sell.
4.4. Contingent goods – a type of futureContingent goods – a type of future
goods, the acquisition of which dependsgoods, the acquisition of which depends
upon a contingency which may or mayupon a contingency which may or may
not happen.not happen.

10. Perishing of goodsPerishing of goods
 The possible causes of perishing ofThe possible causes of perishing of
goods:-goods:-
2.2. Physical destruction of goods.Physical destruction of goods.
3.3. Damage of goods in such a mannerDamage of goods in such a manner
that they loose their commercialthat they loose their commercial
value.value.
4.4. Loss of goods by theft.Loss of goods by theft.
5.5. Lawful acquisition of goods byLawful acquisition of goods by
government.government.

11. Effect of perishing of goodsEffect of perishing of goods
 Goods perishing before formation of theGoods perishing before formation of the
contract.- in case of specific goods suchcontract.- in case of specific goods such
contract is voidcontract is void ab initioab initio as the
performance of the contract is impossible
due to destruction of subject matter.
 Goods perishing before the sale but afterGoods perishing before the sale but after
the agreement to sell.:- in case of specificthe agreement to sell.:- in case of specific
goods the contract of sale becomes voidgoods the contract of sale becomes void
and both parties are excused from theand both parties are excused from the
performance. (Sec.8)performance. (Sec.8)

12. Effect of perishing of goods…Effect of perishing of goods…
 Effect of perishing of future goods.:-Effect of perishing of future goods.:-
Sec.8 applies in this case also whichSec.8 applies in this case also which
says ‘where there is an agreement tosays ‘where there is an agreement to
sell specific goods, and subsequentlysell specific goods, and subsequently
the goods without any fault on thethe goods without any fault on the
part of the seller or buyer perish orpart of the seller or buyer perish or
become so damaged as no longer tobecome so damaged as no longer to
answer to their description in theanswer to their description in the
agreement before the risk passes toagreement before the risk passes to
the buyer, the agreement is therebythe buyer, the agreement is thereby
avoided.’avoided.’

13. PricePrice
 Sec.2(10) defines the price as ‘theSec.2(10) defines the price as ‘the
money consideration for the sale ofmoney consideration for the sale of
goods.’goods.’
 Price has to be in terms of money.Price has to be in terms of money.
 All monitory payments do notAll monitory payments do not
amount to price.amount to price.

14. Fixing the priceFixing the price
 Price is mentioned in the contract.Price is mentioned in the contract.
 The manner of fixing the price isThe manner of fixing the price is
mentioned in the contract.mentioned in the contract.
 It is determined by the course ofIt is determined by the course of
dealings of the parties. when price isdealings of the parties. when price is
not fixed by any of the above modesnot fixed by any of the above modes
a ‘reasonable price’ is considered asa ‘reasonable price’ is considered as
the price of the contract.the price of the contract.

15. TimeTime
 When time is stipulated regarding theWhen time is stipulated regarding the
payment of price :- Time of payment is notpayment of price :- Time of payment is not
considered the essence of the contractconsidered the essence of the contract unlessunless
a different intention appearsa different intention appears from the terms offrom the terms of
the contract. Thus if payment is not made inthe contract. Thus if payment is not made in
time the seller can not avoid the contract buttime the seller can not avoid the contract but
can claim damages.can claim damages.
 When time is stipulated regarding delivery ofWhen time is stipulated regarding delivery of
goods:- time of delivery of goods is normallygoods:- time of delivery of goods is normally
considered essence of the contract. Thus nonconsidered essence of the contract. Thus non
performance at stipulated time will render theperformance at stipulated time will render the
contract voidable at the option of the buyer.contract voidable at the option of the buyer.